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Research Daily

Monday, November 4, 2019

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Facebook (FB), JPMorgan Chase (JPM) and Royal Dutch Shell (RDS.A). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Facebook’s shares have mmore than doubled returns on the S&P 500 year to date (47.7% vs. 22.2%). The Zacks analyst believes that solid mobile ad revenues, driven by impressive growth in Instagram Stories and Feed, and Facebook News Feed, are expected to boost the top line.

Facebook’s initiatives to improve privacy, transparency and authenticity of ads, and remove fake accounts are likely to boost user trust and engagement. Further, partnerships with ESPN and Fox Sports-related streaming on Facebook Watch are a positive. The acquisition of CTRL-Lab will drive growth in the long haul.

However, the company’s rising regulatory headwinds, including the antitrust investigation and the EU’s investigation of Libra, are concerns. The unfriendly regulatory environment is expected to delay Libra’s launch, which Facebook has targeted for the first half of 2020.

(You can read the full research report on Facebook here >>>)

Shares of JPMorgan have gained 11.1% in the past six months against the Zacks Major Regional Banks industry’s rise of 7%. The Zacks analyst believes that decent loan demand, acquisition of InstaMed, opening of new branches and focus on strengthening credit card business will aid financials amid the Fed’s accommodative policy.

The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Defying market expectations, the company recorded impressive bond trading and underwriting business performance in third-quarter 2019, while lower interest rates and muted loan growth.

The company’s significant dependence on capital markets revenues makes us apprehensive, given several geopolitical concerns. Also, the bank is likely to face challenges in expanding mortgage operations. These are expected to hamper fee revenue growth. 

(You can read the full research report on JPMorgan here >>>)

Royal Dutch Shell’s shares have gained 2.8% over the past three months against the Zacks International Integrated Oil industry’s rise of 1.2%. The Zacks analyst believes that Europe's largest oil company’s cash flow continues to increase, allowing it to cut debt while covering share buybacks and cash dividend.

As it is, the Anglo-Dutch company's position as a key supplier of liquefied natural gas should benefit its long-term cash flow growth on the back of attractive growth opportunities. However, there are worries over a drop in its downstream segment earnings while the company’s poor reserve replacement ratio raises concerns about future production.

Royal Dutch Shell's operations in violence-prone regions in Nigeria pose additional risk. Hence, investors are advised to wait for a better entry point.

(You can read the full research report on Royal Dutch Shell here >>>)

Other noteworthy reports we are featuring today include Apple (AAPL), Starbucks (SBUX) and Celgene (CELG).

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Mark Vickery
Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

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